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TMI Blog2010 (11) TMI 833X X X X Extracts X X X X X X X X Extracts X X X X ..... o the petitioner. CA No. 1262/2009 has also been filed by the petitioner, praying for the appointment of a provisional liquidator. 2. The respondent is a public company limited by shares and is incorpo-rated under the Companies Act, 1956. The registered office of the respon-dent company is within the jurisdiction of this Court. The respondent is stated to be in the business of assembling and manufacturing various automobile components. 3. The petitioner is a company registered in Guangdong, China, and is stated to be a manufacturer and supplier of automobile components. 4. According to the petitioner, the parties executed an Exclusive Collaboration Agreement ( Agreement ) on 21-5-2005, whereby the petitioner was to supply certain goods to the respondent on the terms contained therein. The duration of the Agreement was for an initial period of 5 years. As per the Agreement, the petitioner had to exclusively supply its products in India to the respondent, and to no other buyer, company or individual, either directly or indirectly, for export from or usage in India. Further, Article 2 of the Agreement, which governed supply and purchase, stipulated that the payment for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 17-8-2008 that : "Dear Mingming, I have spoken to my bank and they informed us that all the payments mentioned in your list would be done roughly in the next ten days time. Please bear with us till then Thanks Nidhi" 8. Thereafter, on 21-8-2008, payment of an amount of USD 79,131 was admittedly made by the respondent in respect of Invoice No. FW080214, dated 17-4-2008, i.e., at Sl. No. 2 of the abovementioned table, leaving a balance of USD 582,095.40 payable to the petitioner. In this context, and on the same day, the respondent had sent the following e-mail to the petitioner : "Dear Mingming, We have already made the payment of USD 79,131.00 today. Regarding other payments, you will have to wait for another 6-8 weeks as there is hue recession in the market worldwide. Therefore, we request you to kindly bear with us for a few more weeks. Thanks Nidhi" 9. The petitioner sent another e-mail on 25-8-2008, stating that it was unable to accept a further delay in payment, and requested the respondent to clear the outstanding payment as soon as possible. To this, respondent replied on the same day, stating .....Do not worry your money is totally safe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e parties i.e., of USD 384,507.21, however it is your client who is trying to extract the amount which is not legally due to it." 14. The petitioner then issued a statutory notice of winding up dated 5-3-2009 under sections 433 and 434 of the Companies Act, 1956 for recovery of the aforesaid amount of USD 582,095.40 from the respondent. In its reply dated 27-3-2009, the respondent referred to its earlier communication dated 7th January, 2009 and stated, inter alia, that in view of the serious disputes and differences that had arisen between the parties, the matter be referred to arbitration as per Article 9 of the Exclusive Supply Agreement dated 21-5-2005. To this, the petitioner responded via a communication dated 25-4-2009, stating that it had been made clear after the termination of the Agreement vide letter dated 18-12-2007 that all future business transactions between the parties would be individual transactions and would not be administered by the Agreement, and therefore, disputes in respect of the goods supplied by the petitioner after 1-1-2008 were beyond the ambit of the arbitration clause in the Agreement. 15. Ultimately, this winding up petition was fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further particulars or proof of any demands for payment that were raised either contemporaneously, or at the relevant time, on the petitioner by the respondent, in respect of the aforesaid amount, have been placed on record by the respondent. Apart from stating that his client objected to the petitioner s demands on 25-10-2008, as aforesaid, the respondent s counsel had nothing further to say on this aspect. 19. Counsel for the respondent also sought to assail the termination of the Agreement, submitting that his client had not agreed to the same and that the petitioner s letter dated 18-12-2007 did not bind his client because it was written in violation of the principal contract between the parties, i.e., the Exclusive Supply Agreement dated 21-5-2005, which stipulated that either party was obliged to terminate the Agreement at least 90 days before the expiry of the Agreement. Two communications dated 18-1-2008 and 14-7-2008 have been annexed to the reply, in support of this contention. 20. In the e-mail dated 18-1-2008, the respondent stated, inter alia, as follows : "2. Regarding the Exclusive Agreement, our board has not approved the termination of our agreement a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner. The invoices in question are in respect of goods which were supplied between April 2008 - May 2008, and on 17-8-2008, the respondent clearly stated, without reservation, that a sum of USD 661,226.40, demanded by the petitioner against these invoices, would be paid, "roughly in the next ten days time", and even went ahead and paid USD 79,131 on that account on 21-8-2008. The respondent s conduct only demonstrates that the Agreement either continued between the parties subject to the variation introduced by the petitioner s aforesaid letter dated 18-12-2007 or, in any case, a fresh contract came into existence between the parties which did not have any such exclusivity clause in favour of the respondent. For all the above reasons, I do not find force in this contention of the respondent either. 24. Significantly, counsel for the petitioner also submitted at the Bar that, even if it were assumed for the sake of argument, without admitting any liability on behalf of the petitioner, that the respondent was entitled to the amount claimed, a balance amount of USD 197,588.19 was still due to the petitioner out of the total amount claimed. This has not been refuted. 25. From ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was posted for 16-8-2010. On 16-8-2010, counsel informed this Court that no settlement was possible, consequently, orders were reserved. 28. The petition is, therefore, admitted. The citations be published in the Delhi editions of the newspapers Statesman (English) and Veer Arjun (Hindi), as well as in the Delhi Gazette , returnable on 20-1-2011. The cost of publication is to be borne by the petitioner. 29. The Official Liquidator, attached to this Court, is appointed as the Provisional Liquidator. He is directed to take over all the assets, books of account and records of the company forthwith. The Official Liquidator shall also prepare a complete inventory of all the assets of the respondent company when the same are taken over and before the premises in which they are kept are sealed by him. He may also seek the assistance of a valuer to value the assets at the same time, to facilitate the process of winding up. He is permitted to take the assistance of the local police authorities if required. 30. The ex-Managing Director, other directors, Company Secretary and other principal officers of the company to furnish a complete statement of affairs within 21 day ..... X X X X Extracts X X X X X X X X Extracts X X X X
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